According to Chainalysis, a blockchain intelligence company, the decentralized finance (DeFi) market seems to no longer be under the domination of retail investors only: in the second quarter, the footprint of institutional investments in this segment of the crypto market reached even more significant levels. .
In the forthcoming “Global DeFi Adoption Index” report, Chainalysis highlights:
“In the second quarter of 2021, transactions by large institutions – those in excess of $ 10 million – accounted for more than 60% in DeFi, compared to less than 50% of all crypto transactions.”
DeFi has become an important scenario for large players, with banks and financial institutions starting to commit funds to this segment of the market.
The trend probably points to a clear diversification of interests, which now go well beyond Bitcoin.
The Chainalysis report also shows a broad dichotomy in the adoption parameters of DeFi and the broader cryptocurrency market. While emerging markets continue to show greater adoption of “legacy” crypto assets such as Bitcoin (BTC), in the major economies it is DeFi activity that attracts institutions.
Meanwhile, regulators are focusing more and more on the DeFi market: the United States Securities and Exchange Commission recently launched an investigation into Uniswap, the largest decentralized exchange in the ecosystem.
Tighter monitoring protocols targeting the DeFi market have been an important talking point for regulators in major economies. In August, SEC Chairman Gary Gensler identified DeFi as one of seven cryptocurrency-related policy issues for the commission.
Gensler has also previously argued against the decentralized nature of DeFi protocols, stating that many platforms are actually “highly centralized“and they need a license to operate.
The surge in the DeFi market since July has been somewhat thwarted by recent price declines, with the market’s total value locked (TVL) slipped below the $ 100 billion mark.
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